Bitcoin and Dogecoin have roller-coaster week amid Musk tweets
The Musk giveth and the Musk taketh away.
Bitcoin and Dogecoin had a rough week.
Tesla CEO Elon Musk rocked the cryptocurrency world on Wednesday when he tweeted his company will no longer accept Bitcoin as a form of payment for its vehicles. After Musk shared the news , multiple crypto coins took a dive, including the popular meme coin Dogecoin.
Bitcoin's price fell by 14% to dip just below $49,000 on Wednesday. It rebounded a bit to get back up over $50,000 on Thursday. Tesla had a hand in the jumps in Bitcoin's price in February and March, when the electric-car maker said it bought $1.5 billion in Bitcoin and that it would start taking the cryptocurrency for buying its vehicles.
Bitcoin fell off a cliff Wednesday.
Dogecoin, which Musk has championed, also dropped by 13% to a low of 37 cents. It had continued to decline since Musk hosted Saturday Night Live last weekend.
However, prices for the meme coin moved back up Thursday following a tweet from Musk saying he's working with the Dogecoin developers to improve system transaction efficiency.
Working with Doge devs to improve system transaction efficiency. Potentially promising.
— Elon Musk (@elonmusk) May 13, 2021
Dogecoin went up almost immediately after the tweet and peaked just shy of 60 cents Friday afternoon before settling at 55 cents.
Dogecoin spiked just minutes after Musk's tweet.
Cryptocurrencies like Bitcoin were initially intended to be uncentralized digital currencies, but in recent years, they've become more of an investment. Prior to the start of the pandemic, Bitcoin's price was just below $9,000. It peaked in April, almost reaching $65,000. Dogecoin, which started as more of a joke crypto coin, was worth just 5 cents at the start of 2021. Last week, in anticipation of Musk's SNL appearance, it shot up to 74 cents.
Musk's reasoning for no longer accepting Bitcoin as a form of payment was the "rapidly increasing use of fossil fuels for Bitcoin mining and transactions." As a whole, Bitcoin uses more energy than the country of Argentina due to the vast array of computers solving complicated calculations that are the backbone of the cryptocurrency.
At the end of his tweet, Musk says Tesla will look for other cryptocurrencies that use less than 1% of the power of Bitcoin. With several thousand different kinds of crypto currently available, there are "greener" options out there, though they're not nearly as popular, or worth as much, as Bitcoin.
In a tweet Thursday, Musk focused on the growing use of coal to power cryptocurrency.
"To be clear, I strongly believe in crypto, but it can't drive a massive increase in fossil fuel use, especially coal," he tweeted.
To be clear, I strongly believe in crypto, but it can’t drive a massive increase in fossil fuel use, especially coal
— Elon Musk (@elonmusk) May 13, 2021
Montana, New York and Kentucky -- on either the state or local level -- are pushing for more Bitcoin mining as a way to give new life to local coal power plants.